Samsung thinking of expanding its capacity of DRAM next year
Due to the limited DRAM factory capacity expansion in the past two years, and process the difficulty of the transformation, DRAM supply grow significantly slow than normal, with the terminal market consumption in the second half of the season, DRAM contract price opening price since 2016 years.However, samsung was considering raising the competitor barriers to entry, are likely to widen DRAM capacity, could change the pattern of DRAM supply crunch.
In mainstream standard memory module (DDR4 4 gb) contract price as an example, beginning from the last year, by the time of the DDR4 4 gb $13 average pull up to the fourth quarter of this year the contract price is $30.5, offer up six quarters in a row, total rose more than 130%, drive the related DRAM companies profitability increase greatly.So far, samsung DRAM business operating interest rate to 59% in the second quarter, SK hynix has 54% of the performance, meguiar's is 44%.Looking forward to the fourth quarter, DRAM contract prices continue to rise, the profitability of firms also is expected to continue to rise.
Samsung expansion to maintain 1-2 years leading technology, promote new entrants into the threshold
Because of DRAM industry has entered the oligopolistic structure, theoretically manufacturers for operation pattern is delighted with high profit, however, in the number of consecutive memory prices rise, SK hynix, meguiar are accumulated a lot of cash on hand.With the abundant resources, SK hynix will take place at the end of the 18 nm process turns into, wuxi second factory will be built next year, output is expected to 2019;Mircon's announced by the share price increased as the cash capital increase, represent the future in the new factory, prepared to expand capacity and process on the upgrade, the move will undoubtedly arouse vigilance samsung, and samsung began to think about DRAM expansion plans.
Increases production of the samsung may take action, as well as a response to a tight supply situation, the most important thing is that with the increase of DRAM output, repressed memory price rises.Although in the short term high capital spending will bring the ascension of depreciation expense, and lead to decline in profitability, but samsung's eyes is a long-term industry layout and keep its leading position in the DRAM market, and maintain a 1-2 years with other DRAM maker technology gap.In addition, in memory of the first year of the development of China next year, samsung through the push down prices of DRAM and NAND, will be able to improve Chinese competitors barriers to entry, and make the competition development further losses, increase the difficulty and slow down the speed of development.
SK hynix and expansion has meguiar is expected to follow up, DRAM supply growth rate will reach 22.5% in 2018
Samsung intended to pyongtaek production line of factory on the second floor was scheduled to build NAND, partly transferred to the production of DRAM, and all the 18 nm process, plus the original Line17 still have some space to expand produces, samsung is expected to move up to 2018 DRAM output increase 80-100 k, also on behalf of samsung DRAM capacity may be by the end of 2017 390 k of relief approximation to the level of 500 k, will also drive the samsung bits output next year supply by the original forecast of 18% growth up to 23%.
From the overall supply of DRAM, its annual growth rate to 22.5% in 2018, up from 19.5% this year, i.e. DRAM gap between supply and demand may be closing next year, SK hynix and micron is expected to join an arms race in high possibility to consolidate the city accounted for, add new variables to DRAM market.
Samsung, however, the move will likely change pattern of DRAM market supply is tight, just modify current competitors excess profits, profit down to a more reasonable structure;In addition, as part of a consortium investment focus shifted from NAND Flash to DRAM, will hopefully reduce the NAND Flash oversupply situation next year, and then slow down the overall NAND Flash the average selling price (average shot price) the speed of the decline.Samsung enlargement, perhaps, for our DRAM market in 2018 will bring some impact, but for the long-term development of the whole memory industry is not necessarily a negative news.
In mainstream standard memory module (DDR4 4 gb) contract price as an example, beginning from the last year, by the time of the DDR4 4 gb $13 average pull up to the fourth quarter of this year the contract price is $30.5, offer up six quarters in a row, total rose more than 130%, drive the related DRAM companies profitability increase greatly.So far, samsung DRAM business operating interest rate to 59% in the second quarter, SK hynix has 54% of the performance, meguiar's is 44%.Looking forward to the fourth quarter, DRAM contract prices continue to rise, the profitability of firms also is expected to continue to rise.
Samsung expansion to maintain 1-2 years leading technology, promote new entrants into the threshold
Because of DRAM industry has entered the oligopolistic structure, theoretically manufacturers for operation pattern is delighted with high profit, however, in the number of consecutive memory prices rise, SK hynix, meguiar are accumulated a lot of cash on hand.With the abundant resources, SK hynix will take place at the end of the 18 nm process turns into, wuxi second factory will be built next year, output is expected to 2019;Mircon's announced by the share price increased as the cash capital increase, represent the future in the new factory, prepared to expand capacity and process on the upgrade, the move will undoubtedly arouse vigilance samsung, and samsung began to think about DRAM expansion plans.
Increases production of the samsung may take action, as well as a response to a tight supply situation, the most important thing is that with the increase of DRAM output, repressed memory price rises.Although in the short term high capital spending will bring the ascension of depreciation expense, and lead to decline in profitability, but samsung's eyes is a long-term industry layout and keep its leading position in the DRAM market, and maintain a 1-2 years with other DRAM maker technology gap.In addition, in memory of the first year of the development of China next year, samsung through the push down prices of DRAM and NAND, will be able to improve Chinese competitors barriers to entry, and make the competition development further losses, increase the difficulty and slow down the speed of development.
SK hynix and expansion has meguiar is expected to follow up, DRAM supply growth rate will reach 22.5% in 2018
Samsung intended to pyongtaek production line of factory on the second floor was scheduled to build NAND, partly transferred to the production of DRAM, and all the 18 nm process, plus the original Line17 still have some space to expand produces, samsung is expected to move up to 2018 DRAM output increase 80-100 k, also on behalf of samsung DRAM capacity may be by the end of 2017 390 k of relief approximation to the level of 500 k, will also drive the samsung bits output next year supply by the original forecast of 18% growth up to 23%.
From the overall supply of DRAM, its annual growth rate to 22.5% in 2018, up from 19.5% this year, i.e. DRAM gap between supply and demand may be closing next year, SK hynix and micron is expected to join an arms race in high possibility to consolidate the city accounted for, add new variables to DRAM market.
Samsung, however, the move will likely change pattern of DRAM market supply is tight, just modify current competitors excess profits, profit down to a more reasonable structure;In addition, as part of a consortium investment focus shifted from NAND Flash to DRAM, will hopefully reduce the NAND Flash oversupply situation next year, and then slow down the overall NAND Flash the average selling price (average shot price) the speed of the decline.Samsung enlargement, perhaps, for our DRAM market in 2018 will bring some impact, but for the long-term development of the whole memory industry is not necessarily a negative news.